We talked to Gonzalo Ferreyra, Vice President of Sales and Marketing for Viz Media, in our annual interview to review the state of the market, Viz’s year, and plans for the future.In Part 1, we talk about the manga market, the competition for consumers’ attention, digital comics, and original material.In Part 2, we talk about the anime market, Viz’s plans for Blu-ray, the impact of digital distribution, and the TV market for anime.In Part 3, we talk about finding new consumers with a smaller mall footprint for manga and anime and look forward to 2010 in both manga and anime.

Let’s start with the big picture on the manga side: how do you evaluate the market for manga and for Viz manga in the year we just finished?

We certainly saw a much, much tougher market than we’ve ever seen before for a wide variety of reasons that I know you’re very familiar with.In terms of actual sell-through of manga we saw very steady numbers.What’s difficult is because of the state of the market, because of the returns and the sell-in fluctuations, because of what I tend to think of as the irrational exuberance a year or so ago of sections being built up dramatically (perhaps a little too dramatically), the sell-in is a tough thing to gauge.I’d rather look at the sell-through and the sell-through has continued to be very strong and very encouraging.The market as a whole is more conservative, more cautious.I think the number of distractions for these consumers is increasing at a geometric rate.It is becoming a tougher market.There’s no question in my mind.That said we remain very positive.We’re seeing some absolutely fantastic numbers on selected titles and are very encouraged by a lot of what is forthcoming, not just from Viz quite frankly.A lot of what Yen Press is doing right now is very exciting and I think we’re going to see a lot of what can happen in 2010.

You said there were some great numbers, some bright spots--what are some examples?

Vampire Knight is unquestionably the standout in terms of continuing to exceed expectations.Obviously it’s a title that is more clearly than most of our properties driven by a local phenomenon that we’re more than happy to participate in, and then also other vampire-related titles.Blackbird, which is perhaps a little more distantly vampire-related shojo title (Vampire Knight is shojo as well), performed very well.We have Rosario & Vampire which is a Shonen Jump title that is doing very well.

Quite frankly the continued strength of Naruto, now that it’s up in the forties, is pretty astonishing to me--the fact that the attrition on that series is relatively low and the numbers continue to be phenomenal after the several dozen volumes that are out there.Bleach as well continues to impress us with its performance placing very high.We saw some very encouraging early numbers from Tegami Bachi, which is a brand new series that launched this year that we were highly anticipating.

Can you differentiate at all in terms of market between the three channels--bookstores, mass, and the comic and other otaku stores?How did those channels differ over the last year?

The answer I just gave was really thinking about the trade book channel.The mass continues to be very, very encouraging and continues to be the bright spot in terms of growth.Obviously, there is a limited title selection (which is fine) with very strong numbers for a handful of titles.It’s not depth.It limits to some degree the impact on the market.

In the case of the comic store business it’s been a little rocky there as well, largely because of the market forces we’ve seen out there and some of the same challenges that we’re seeing in the trade.What is encouraging is how actively they have embraced particular initiatives of ours--the Signature line, the seinen titles.We’ve seen very strong performance.To my mind that’s where you’re broadening the market and finding new opportunities.It’s been very good.

You mentioned there are more and more distractions for your core manga market and then you started talking about hot titles which are vampire-related.Is one of the things that’s unsaid there that the Twilight novels are taking away some audience?

I don’t know.In terms of taking it away I’d like to think that it’s creating some fans as well.Anything that gets kids into the stores and reading actively... They can only read Twilight so many times.That’s when they come over and they start poking around and they find the Vampire Knights and Rosario & Vampires and other titles.

Let’s not kid ourselves, the Twilight fans number in the many, many millions--they’re manga-like numbers in Japan, here. If we can get a fraction more of those readers actively reading manga, if Yen can do that and bring those kids over to read the Twilight manga, and then move on and become manga fans it’s very encouraging.

I don’t think I blame any single property.When I say that it’s video games, it’s film, it’s DVDs, it’s television, it’s the Internet, it’s Facebook.All of that.There is simply--and I see it in my children--a volume of entertainment options and quite frankly time-consuming options that were unheard of in my childhood certainly.It becomes difficult.We’re not competing just against graphic novels or just against books.We’re competing against all of that.

When I think about the fact that Modern Warfare 2--I believe it sold over four million copies the first day.To my mind that’s four million potential customers who are immersed in this game now for weeks at a time.They’re probably not doing too much reading during that period.That’s what I’m getting at.

That’s a nice segue into the next question--we wanted to ask about reaching consumers where they are on their cell phones.Shueisha announced a month or two ago it’s initiating a global program to sell phone manga globally, including in English.Is that something that Viz won’t be involved with?Is all that going to be controlled out of Japan, sales through cell phones?

There’s a lot to be determined there.That initiative specifically was directly between Shueisha and Microsoft.Right now we are in discussions with our licensors as to the ongoing strategy, just how it’s going to be handled, and what Viz’s role will be has not been determined.

Cell phone manga are such a big deal in Japan.In the last year in the United States you saw a lot of growth in the amount of content that’s available for the iPhone in particular.Japanese companies don’t seem to be involved in that and as a result are you losing an opportunity to reach those fans where they are?And why is Japan going so slow at something they’re so good at in their home market?

I don’t want to speculate too much and quite frankly I do regret that we’re not able to move more quickly into the U.S. market right now.I’m watching it happen, I’m seeing some fantastic things on my iPhone and applications every day that allow me to read American comics.I’m eagerly anticipating the day when manga will be an active part of that.Like I said, I hesitate to speculate too much but there are so many issues in terms of rights and there’s so much that needs to be sorted out on the Japan side in terms of the creators’ wishes, in terms of the rights challenges.They simply want to ensure that any strategy fully addresses that and protects the content.That if anything is what’s behind the pace right now.

Turning to the Web side, the desktop for a minute, you recently launched a new Takahashi manga in the United States and as part of that the material became available online in English at around the same time as it originally became available in Japan in paper form.We’re curious as to how you’re evaluating that strategy and what it means for the future.

I think we will continue to evaluate it and we will continue to experiment.It is very difficult as I think you know better than anyone to really assess the impact, positive or negative, of sharing free previews and free bits of manga online on physical copy sales.We now have an online team that is focused on actually establishing some metrics and establishing some tracking that will hopefully help us understand this a little better.Quite frankly we’re not really at this point ready to make a decision as to where we’ll be going with that.That being said, I see us continuing to assess this.

On the publishing side over the last couple of years at various times there’s been talk about Viz publishing original material here in the States.Anything going on that in realm?

We have several conversations happening.At this point it’s not a full-blown program or imprint, but we are at the early stages of a few discussions and we hope to venture into that area more aggressively at some point in 2010, maybe 2011.